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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Frank Ferrari who wrote (313)	5/13/1999 2:06:00 PM
From: BI*RI	Read Replies (1) \| Respond to of 24042

So, the price is going to increase over the next year less than it has this week? I don't think so. Sorry Gruntal, but you'll need to reiterate a few more times.

To: Frank Ferrari who wrote (313)	5/13/1999 11:20:00 PM
From: jack bittner	Read Replies (1) \| Respond to of 24042

how does gruntal figure 160. price is now 23 times sales and about 70 times "earnings" (quotes because we properly discount the non-cash charges for acquisitions). does it get to 160 because sales will grow 15% to $7 a share and because the sales multiple will always be 23 times (23x7=161)? but sales are growing now at 60%+, so shouldn't it be $6 x 160% = $9.60 sales per share x 23 = $220 price per share? And why only 23x sales? last week the price was 20x sales, so the multiple is growing at 15% a week. let's say the multiple growth throttles down to 1% a week 50% a year. next year the multiple will be 35 times sales (not much compared to internet stocks) x $9.60 = almost $350 a share. does unph have a lock on any of its products? patents? lucent, nortel make all that stuff in-house. if it's proprietary, then any of those skilled people can leave lu and nt for their own start-ups don't those huge mark-ups and tremendous demand get the attention of the asians? these multiples are for some kind of franchise. there's somewhat of an analogy in intel. nobody could organize the money and talent to knock off intc. is that the case with unph? is the whole story that unph has too much of a head start? if so, intc never sold at such multiples. i suppose it could sell at 23 times sales forever, or even more. last week it was only 20 times. it's up on no news: Canada approved the unassailable merger. so the multiples are growing faster than the facts. it could go to 50 times sales, 1000. in the late 1980's the Japanese became convinced that the Imperial Garden around their Palace was worth more than the State of California, and that the rest of their land had proportionately that value, then in the early 90's they decided it wasn't and their economy collapsed. suppose i had a business earning 2 cents a year, and i said give me $100,000 for a piece of it and next year you'll be able to sell it for $200,000. and you said "how can i know that?" and i said, "because i'm growing at 100% a year: last year i earned a penny and now i earn 2 cents. so i'm gonna double again, and so will your $100,000" would you say, "when do i get a return on my money? i don't want to have to always be looking around for some other guy to buy me out. i wanna be able to sit with my investment and have some money coming in." but not with these stocks. when you have a stock that has a valuation something like the way you'd value a personal business investment you can feel there'll always be someone who'll see the value as you do and pay for it, but when the valuation is based on future exponential growth that can only be guessed at, i for one wonder what happens when everyone changes their minds. i want to be wrong. i'm enjoying the party, too. what am i missing? is there a solidity to these valuations i don't understand?